in the state's lightly regulated charter schools – which are funded with tax dollars but run by private companies or groups – cheating was detected at almost four times the rate of traditional public schools. Cheating was more common at underachieving schools, where the pressure to boost scores is the highest.

Part 2 (below) focuses entirely on charter schools:

In 1998, state officials decided to increase the number of charter schools and requested applications from entities interested in sponsoring a school. Applications poured in; a charter school could generate millions of taxpayer dollars a year for even a small organization.

In all, 84 proposals were submitted for a specific type of charter school that would target students at risk of dropping out or failing. Two came from the husband-and-wife team of Jesse and Artie Jackson. They proposed a Houston school named for Dr. Jackson and a Fort Worth school named for Ms. Jackson's mother. (On the first page of the Jesse Jackson proposal, Dr. Jackson is listed as the school's "principle.")

TEA staffers were asked to evaluate each of the applications, and they were not impressed with what the Jacksons had to offer. In the ranking system they created, the Jesse Jackson proposal ranked 67th of the 84 applications. Theresa B. Lee ranked 79th.

"We were really trying to find out who was really ready to open a school and who wasn't," said Brooks Flemister, who was at that time the agency's senior director for charter schools.

The schools had the support of a number of legislators in their hometowns. Houston Reps. Harold Dutton Jr., Garnet Coleman and Ron Wilson wrote letters of support. So did Sens. Mike Moncrief of Fort Worth and John Whitmire of Houston.

But reviewers of the two schools' applications had numerous issues with the proposals, ranging from the schools' lack of a "clear written vision statement" to problems with the way they planned to teach their curriculum.

In the end, though, those concerns didn't matter. On Sept. 10, 1998, at a now infamous committee meeting of the State Board of Education, dozens of angry charter-school applicants demanded that their proposals be approved. Several argued that the state was being racially discriminatory when it rated some proposals from minority-led organizations lower than some from white-led ones.

Under pressure from the audience, the board committee voted to reject TEA staff recommendations and to give every applicant a charter. That decision has haunted the Texas charter movement since, as a number of the schools approved that day have gone on to have serious financial and management problems.

"That was the worst day in my professional life," Mr. Flemister said. "You either have a selection process that is precise, or you just open up the gates and let everybody come in. By opening up the gates, we got some that just weren't ready to run a school."